- Talent Management
In May 2016, Forbes published an article declaring the performance review to be dead or at least no longer particularly useful. As the contributing writer, Liz Ryan, wrote: “I presided over the annual performance-review process for 10,000 employees and I regret it now. Performance reviews are expensive, time-consuming and pointless. They are worse than pointless because they get employees focused on the wrong things.” This Forbes article is just one of many recent publications suggesting that it is time to step back from the performance review. But should we really abandon the process? Read the Autodesk case study.
As recently reported on Talent Management 360, at least some workers–namely, Millennial workers–welcome performance reviews and even want to have them on a more rather than less regular basis. At the same time, however, a notable percentage of workers (many older) continue to view the performance review with suspicion. In one recent British study, 30% of employees indicated that they saw their performance review as unfair.
The problem with the existing approach to the performance review is twofold. First, no one likes to be labeled. This sets off extreme responses–puts employees on the defensive. When a supervisor says, “You’re in the top 15% of sales representatives, they may mean it as a compliment but they are also saying, you’re not the best.” While some employees will rise to the challenge, others will disengage. After all, why stick around if you don’t feel truly valued? In this respect, ranking employees during reviews is also directly linked to high churn in the workplace.
Another key problem is that performance reviews are based on false perceptions of human growth. As Carol Dweck at Stanford University has discovered too many people are locked into a single way of perceiving growth or a “fixed mind-set,” which assumes intelligence and potential are determined at birth. In fact, a “growth mind-set,” which assumes learning is a life-long process, is more productive, but it is often absent, especially during performance reviews. Reviewers, for example, may have calcified views of an employee’s potential and as a result, fail to recognize their growth. Employees may also fail to bring a growth mindset to their work and stagnate. Fortunately, there are ways to overcome the limitations of existing performance reviews.
Employees need to feel like their reviews are valuable. Undergoing a review is already stressful. If there is no reward at the end, employees will end up feeling like their time and energy is simply about the need to generate metrics for their organization. Make a concerted effort to ensure that performance reviews are directly linked to employee recognition (e.g., bonuses) and promotions. This, of course, means having clear benchmarks for success. If you rely on reviews for recognition and promotions but apply arbitrary standards, you risk being accused of favoritism and your efforts will backfire.
The best way to ensure reviews are effective is to involve employees. The process should feel and be collaborative. Invite employees to respond to their own evaluation (if they disagree, there’s a chance they will be able to offer an explanation or alternative reading that should be taken into account). Also, invite employees to provide feedback on the review process itself. Is the timing appropriate? Are the criteria clear? What would they like to see change about the process itself?
If performance reviews identify problems but fail to offer solutions–or leave the solutions up to employees alone–they will likely hold little value. The goal, after all, is to create a process that has some degree of built-in value for both the employer and employee. To do this, ensure that critiques are not simply offered but also connected to specific training goals. If an employee has made a compliance error, this may simply mean asking them to engage in a refresher course on compliance, or on a specific compliance issue. If the employee has poor group dynamics, explore why. If its a personal issue and they are under stress at home, the employer may suggest outside support services. If they simply have yet to develop great teamwork skills, the employer can explore additional training to help them respond to the deficit. What’s obvious, however, is that leaving the “fix” up to employees is a way to ensure that employees will continue to see performance reviews as a waste of time or simply as a way to unfairly target employees.
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